Seeking Alpha

Nokia estimated to have 87% of WP8 base; Bernstein downbeat about Q3

  • AdDuplex states Nokia (NOK -1.6%) hardware accounts for 74% of all Windows Phone (MSFT +1%) devices tracked by its ad network. For Windows Phone 8 hardware, that number rises to 86.9% (up 150 bps from July).
  • The Lumia 520's popularity has much to do with those figures. The low-end phone (Wal-Mart sells a variant for $130 unsubsidized) accounted for 18% of all tracked WP devices, and 27% of WP8 devices, easily the most of any model. The high-end 920 is #2 with respective shares of 11% and 17%, and the mid-range 620 #3 with 9% and 14%.
  • "At this rate, Nokia will be the only Windows Phone OEM by the holidays," says TechCrunch's Alex Wilhelm after surveying the data. He argues the figures are evidence of limited WP support from other OEMs. "Microsoft’s mobile efforts are fully dependent on Nokia’s action. This is disconcerting..."
  • Meanwhile, Bernstein's Pierre Ferragu, a long-time Nokia bear (previous), argues declining Lumia ASPs (the 520 has much to do with this), tough competition, and slowing high-end smartphone demand could yield a "disastrous" Q3 for Nokia.
Comments (20)
  • Pierre B!tch plz...
    20 Aug 2013, 12:47 PM Reply Like
  • How come that analyst hasn't been fired yet? His customers would have lost bundles if they followed his advice on Nokia to date.

     

    I guess he doesn't allow for the cheap price they purchased the other 50% of NSN for either....
    20 Aug 2013, 12:52 PM Reply Like
  • richto,

     

    The problem with being a perma-bear is that at some time in the future, you will be right. The stock will adjust, at the very least, and then you can claim responsibility for predicting the stock would go down.

     

    Conversely, Bulls have it much harder because there is no guarantee a stock will ever go up, opposed to a bear, that can be 100% correct that the stock will adjust, even along its way up, and the perma-bear can be right in that respect 100%.

     

    The real problem, as you point out, is that following this particular perma-bear, you would have lost a "bundle" going with the bear position.

     

    I've watched bears beat on Microsoft since it was an IPO. Cry more bears, because you have been wrong for 30+ years.

     

    Nokia, not so much. But now Nokia/Microsoft are virtually locked at the waist, at least for now, and as the past proves--and the past is really all we have to go on as all else is pure speculation--betting against MS is a bad bet indeed. MS and Nokia business decision lately seem to be lock-step. They're not tripping themselves, nor each other.
    20 Aug 2013, 05:01 PM Reply Like
  • Pierre will be working for RBC soon, he will feel right at home with them.
    20 Aug 2013, 12:59 PM Reply Like
  • Oh, but Pee-aire, zees zlo-selling smartaphones, eet affects everyone, no? Even de Apple ees not safe in do - how you say - eegosysteam? And dose BlackaBerries... I hate to write dees, but OMG!!

     

    Looks like Nokia zhould be happee to 'ave those 521's to sell, eh?
    20 Aug 2013, 12:59 PM Reply Like
  • "Happy to have the 520's to sell."
    What was supposed to save blackberry a PF favorite? Why the low cost variant.
    What is supposed to save Apple? Why it's the low cost variant again.
    And what is allowing Android to crush everyone else? The low cost variant.
    Now Nokia makes a great one that people the world over want and it is put forth by Pierre as the reason for the 1.60$ price target and the doom of Nokia. Whatever

     

    Long Nokia
    20 Aug 2013, 01:20 PM Reply Like
  • Haha, great point WhatdoIknow.

     

    As it has been said many times on SA, the analysts will continue to spin everything in a negative light. However, when they finally have nothing left to pick on, everything will flip in an instant and Nokia will be able to do no wrong and it will be time to pump, pump, pump.
    20 Aug 2013, 01:24 PM Reply Like
  • Master,

     

    Except that the reason Android came on so strong is that it had virtually no other competition other than iOS, until now.
    20 Aug 2013, 05:03 PM Reply Like
  • This dependency should increase leverage for Nokia when dealing with Microsoft. Would still like to see Nokia manufacture some android phones to take some market share from Samsung. However, I believe the WP8 is a better operating system then android.

     

    Finally, I don't believe anyone really cares what Bernstein's analyst thinks, since he doesn't see the forest through the trees and seems to be one sided and closed minded. As more carriers sell lumia devices, market share for WP8 will continue to increase, albeit slowly it seems. Europe needs to recover more fully for Nokia to benefit with quicker market share growth..
    20 Aug 2013, 01:03 PM Reply Like
  • Yes, drive that stock down so us long Nokia's can reap the benefits.
    I would love to pay $1.60 per share. Thank you Pierre :)
    20 Aug 2013, 01:51 PM Reply Like
  • Since I'm mostly long 2015 call options, I would not like to see $1.60/share. :p

     

    To be honest, anything under $3 might give me a heart attack!

     

    Good luck all! If NOK's NSN margins improve any more, their price will rise due to that alone.
    20 Aug 2013, 03:47 PM Reply Like
  • Stock,

     

    You could be dead by 2015. LOL I don't see how you guys do that. :)
    20 Aug 2013, 05:04 PM Reply Like
  • PF should get a room with Mark Sue they can play 'Push the Blackberry' all day.
    This just makes RBC and Bernstein's look like amateurs at best and market manipulator's at worst.
    Remember Mark Sue saying Nokia would announce a Q2 profit warning and Blackberry would recover to $18 per share.
    I think the more they bitch the better us Nokia longs should feel.
    20 Aug 2013, 02:52 PM Reply Like
  • I wouldn't really comment on Bernstein as his analysis is useless but I would like to comment on the TechCrunch concern. WP lies somewhere between Android and iPhone in terms exclusiveness vs availability. I almost think its better to Nokia to own WP. I also think the reason why other OEM's are leaving WP is because of Nokia's dominance which is, in my opinion, a good thing and shows the sheer hardwork and determination from Nokia has finally paid of.
    20 Aug 2013, 03:25 PM Reply Like
  • Omar

     

    I tend to agree. Maybe it is nice to have little buddies in your OS, but they tend to take away some of the sales of your own devices. MSFT has even tried to help some of them along, such as HTC. But if this is the battle, NOK is the battleship. It still is a risky gambit, but one that seems better by the day.
    20 Aug 2013, 03:32 PM Reply Like
  • @Omarsiddiqi

     

    Well said. Elop is delivering, slowly but surely.
    20 Aug 2013, 04:03 PM Reply Like
  • Microsoft has always been slow, plodding, stuffy, and confused-- and an a$$ kicker in the business world. I would not bet against MS. When is the last time MS lost a fight? (Except the antitrust browser law suit in Europe, that I agreed with.)
    20 Aug 2013, 05:06 PM Reply Like
  • Reading this:

     

    http://bit.ly/14zISRt

     

    One wonders, how many Lumias were really sold in July?
    Everything points to a great 3rd quarter for Nokia´s smartphones.

     

    How can a guy predict a catastrophic 3rd quarter when we are only half through it? He is not honest, is the best we can say about him.

     

    "The dogs bark but the caravan moves on". Arab Proverb.
    20 Aug 2013, 06:23 PM Reply Like
  • Russian event

     

    "Russian site “Hi-Tech.Mail.Ru” has received an invitation for a Nokia event which will be held on 28th Aug in Moscow, Russia. Interestingly, the event is titled as “World premiere” and there is a piano in background. It is very hard to guess as the Nokia Tablet is now tipped as scheduled in September and Phablet may come in November. So is Nokia going to announce dual-sim Lumias? Though, according to a tip received by us, dual-sim Lumias were supposed to come in October, but you never know."

     

    My sources tell me this is a special new phone. As with the Nokia 1020, this is another niche product, code named "Big Mike." As with the 41MP camera, this one has sound recording ability that oversampes every conversation within 1000 meters. At a special presentation, the introductory model is to be given to Soviet President and humanitarian, Vladimir Putin. His has the letters 'Vlad' embossed in gold script across the top and a nuclear battery capable of 12,000 hours of continuous use. The camera is a standard 5MP as found on the 521 and the phone has similar features as well.

     

    The audio portion, accessible by remote monitoring, is so efficient that not only can it hear a pin drop, you can actually hear it fall through the air. Whispered military secrets, locations of those given temporary asylum, the sounds of ants walking across a kitchen floor... all can be readily separated and distinctly replayed.

     

    President Putin, quite a fan of high technology, is said to be delighted to receive the inaugural production device and looks forward to discovering its fun features for years to com. They will be available to select members of the politburo and military staff on an exclusive basis for 6 months at $29.95 without a contract.

     

    Additional launches are planned for China, North Korea, Cuba and Iran in the coming months.

     

    No similar release is planned for the US. "Why bother?" asked one Microsoft executive.
    20 Aug 2013, 06:56 PM Reply Like
  • Decreasing ASP of the lumia 520 is not relevant as long as it results in large volume sales , which seems to be the case . Stable ASP with small sales is a BB specialty , we know the result .

     

    Large volume also result in lower production costs a fact lost on analysts . Besides Nokia produces in SE Asia (Vietnam ) , and currencies in that region have fallen 10% on average relative to the US$ and Euro. Which means their production cost is lower .

     

    If Nokia can generate a 20-25% margin on a $20 basic phone , I am sure they can do the same or better on the 520 .

     

    There is also an important positive side effect , more devices sold means that more developers are going to release more apps on WP8 . The only real argument by critics against WP8 will disappear . Then higher end lumia sales will start to show dramatic improvement , as the Android folks will start to switch to WP8 . Nokia is back with a vengeance

     

    Analysts are not business people , in business , if one is late on the market and faced with stiff competition , one has to reduced price or/and come with features that no one else has , no choice . Nokia is doing both (520,1020) and grew . Apple so far has done neither , their market share is down year to year from 20 to 13.2%.

     

    Long Nokia
    21 Aug 2013, 02:46 AM Reply Like
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